In what appears to be a classic case of don’t get mad, get even, a former Coles executive is taking on the major grocery chains by carving out a slice of the $10 billion retail meat market.

Peter Scott,
who was head of merchandising at Coles until he was sacked in 2006, plans to roll out a chain of about 30 meat “superstores" after private equity firm Equity Partners acquired a 53 per cent stake in Tasman Market Fresh Meats.

“We have 15 sites and we’re looking to more than double that, primarily in Victoria," Mr Scott, Tasman’s chief executive, told the Australian Financial Review on Tuesday.

Woolworths and Coles account for about 55 per cent of retail meat sales and independent butchers about 45 per cent.

Tasman Market is already the largest independent meat retailer in Victoria and wants to take share from both the major chains and the independents with a unique “big box" retail format more common in liquor, stationery and sporting goods than fresh food.

“We think there’s real room for a category killer in the sense of bigger stores and more variety for the customer," Mr Dhawan said. “Coles and Woolworths typically have 200 SKUs (stock keeping units) – we have 450 SKUs."

Tasman Market’s stores are about 600 to 800 square metres, four times the size of an average suburban butcher shop, and stock a wide range of beef, lamb, pork, poultry, frozen seafood as well as delicatessen products, sauces and savoury snacks. Meat is prepared and packaged on-site, enabling the chain to achieve higher yields from carcasses. Mr Scott says Tasman Market is “not trying to get onto anybody’s radar – we are just focusing on what we have to do."

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However, the chain’s low-cost operating model and its strategy of undercutting competitors by about 30 per cent on bulk packs has created a stir in the retail meat market.

After a distinguished 30-year career with the former Coles Group, where he ran Officeworks, Liquorland and grocery merchandising and marketing, Mr Scott left the retailer in 2006 after breaching the retailer’s code of conduct. He bought an apartment from
Giuseppe Catalfamo
, the founder and chairman of Tasman Meats, which was then Coles’ main supplier in Victoria and Tasmania.

Tasman sold its processing operations in 2008 to Swift Australia to focus on its retail meat operations and now has annual sales around $100 million. According to ASIC records, Mr Catalfamo is still a director of Tasman Market and continues to hold a minority stake in the company along with Mr Scott and Tasman’s senior management team.

Equity Partners also owns stakes in Amalgamated Hardware Merchants, home delivery business Aussie Farmers and healthcare supplier Australian Naturalcare Products.

Mr Dhawan said the private equity firm was likely to retain its interest in Tasman Market for three to five years before considering a trade sale or IPO.

“If we can get it to 30-odd stores, we’ll have a number of options because there will still be plenty of growth left in terms of a national roll-out," he said.